Going Mobile: Egypt Gears Up for Cellphone Banking

They were just 400 Egyptian pounds (US$67) — payment for a month of piecemeal work rigging TV dishes in the northern Cairo district of Shubra El-Kheima – but now they’d gone.

Sitting in his dank single room, located up a muddy alley a half-hour’s walk from any major commercial enterprise, Hani toys with the broken padlock from his door and vows to find a safer place for his money.

At 36 years old Hani has never had a bank account, something he has in common with 85 per cent of his countrymen. In an economy that mainly runs on hard cash, he’s loath to waste time battling for a place at the bank counter.

“What’s the use? The nearest bank is miles away. Any money I can afford to deposit I’ll need back within a week,” he says with a weary chuckle.

But Hani has something else in common with most Egyptians — a sleek, well-thumbed mobile phone that is his constant companion, used more often than his slender wallet.

While less than a fifth of Egyptians use banking services, the overwhelming majority are mobile phone-users. The number of subscribers to the country’s three networks – Mobinil, Etisalat and Vodafone – reached nearly 74 million from a total population of 83 million in early 2011. Telecoms analysts say every Egyptian will have access to a mobile by 2013.

It’s this mismatch between bank and mobile use, say telecoms firms and anti-poverty campaigners, that can be key to revolutionising the way even the poorest Egyptians handle their money.

If everything goes to plan, users of all three Egyptian networks will soon be able to make limited cash transactions via their mobile phones. Using a new ’mobile wallet’ system, customers will be able to enter a mobile phone shop and pay cash in exchange for virtual credits that will be stored on their handset. They can then transfer funds to another mobile with just a few thumbclicks, the recipient changing the credits back to cash at another store.

Advocates say the system gives people a safe, uncomplicated way to temporarily bank money as well as a low-cost method for transferring funds to distant family.

“It will definitely have a positive impact on poorer families who don’t normally make money transactions because of the banks and paperwork,” says Ahmed Ghoneim, professor of economics at Cairo University.

“Those working in urban areas can send funds to family in rural areas, while parents in villages can send money to their children studying in the cities.”